Global Tax Hounds Will Put Bite On Us

The Tax Man of the future may speak a dozen languages, work for a multinational revenue service, and use sophisticated computers to track your income from halfway around the globe.

Unthinkable?

Not according to 300 international finance experts attending a recent Washington conference on tax policy in the 21st century.

Those experts, including U.S. Treasury Secretary James Baker, said increasing longevity, declining birth rates, rising interest burdens, large government debts and the need to reduce deficits are creating revenue demands that current tax structures and policies simply can`t cope with.

``If I had to summarize ... I would say that we are going to live for a long time, with more expenditures than we would like, financed by more and worse taxes than we would like,`` Washington economist Herbert Stein said.

Inevitably, the experts agreed, this growing hunger for tax dollars will lead to the development of global tax policies aimed at maximizing collections.

``The world community can prosper by making tax systems more consistent with one another. Incompatible tax rules can be as dangerous and self-defeating to the flow of commerce as the more obvious trade barriers,`` Baker told the conference.

Added Harvard`s Lawrence Summers: ``As long as the world remains at peace, world economic integration is likely to continue. And while radical reform in international tax law is not currently on the political agenda, the trend toward economic integration will put it there by the 21st century.``

THE FUTURE IS HERE

Don`t dismiss his comments as the ramblings of an ivory-tower academic. The truth is, the United States already has both bilateral and multilateral tax agreements on the books and it`s not unusual for internal revenue services to cooperate with one another.

But does this mean we will pay multilateral international taxes in the very near future?

The experts don`t think so.

There are, they said, serious issues of national sovereignty that would have to be resolved first.

However, that doesn`t mean you should ignore the possibility that it might happen soon.

Because even if a multinational income tax is never established, it`s certain that governments will increase their cooperative efforts in an attempt to wring more tax dollars from both individuals and companies.

And as they do, they will focus their attention on areas, such as South Florida, that have multinational populations and a strong international trading sector.

HELP PLAN TAX POLICY

What, then, should you do?

Stein summed it up best when he told participants to ``regard the more worrisome thoughts expressed at this conference as a warning rather than a prediction, so they may have some positive effect on future policies.``

To begin with, then, you might try writing a letter to your congressman urging him to pursue ways of eliminating double taxation on corporate profits.

There are many instances today where companies are forced to pay taxes two and even three times on the same profits. One advantage of a coordinated tax policy could be the elimination of those multiple taxes on the same income.

But, believe me, that won`t happen unless you make it happen.

Because if you sit back and wait for a benevolent government to eliminate your taxes, you`re more likely to get something else.

Such as, for example, an international version of the infamous Florida Unitary Tax.